Latest News Clips 2018.08.27

1.      How The U.S.-China Trade War Will Transform The Global Economy

Forbes, Jul 13, 2018

The trade war that U.S. President Donald Trump started will profoundly reshape the global economy. We need to be prepared for it. Here’s a brief description of the transformational forces unleashed by the trade war and what they may wrought in the future.

The trade war has accelerated several trends that had been underway for some time. Consider the following.  

In 2017, exports from EU (the collective of 28 member countries, as distinct from the Euro Zone) to Asia was bigger than that to the U.S.; and, more significantly, EU’s exports to Asia in the last decade have been growing almost twice as fast as its exports to the U.S. While Asia’s exports to the EU in 2017 was still slightly lower than that to the U.S., but it is also faster growing, making the EU increasingly more important to Asia, according to the IMF's Direction of Trade data. From a simple perspective of market size, Asia today is far more important to the EU than the U.S., and the EU will soon be more important to Asia than the U.S.

Asia’s market size for imports reflects its vibrant and growing consumer markets that are increasingly prosperous. Measured by estimates of private consumer expenditure, Asia today is just about as big as the U.S. The big difference is, however, that private consumer expenditure in Asia is growing at twice the speed compared with the U.S. If Japan is excluded, Asia’s growth is three times faster. Even more striking is China where private consumer expenditure has been growing at an average of 13.8% a year in the last decade, over four times faster than in the U.S., according to the World Bank WDI database and Eurostat. Not surprisingly China is now the largest market for an expanding list of countries, which includes Australia, Brazil, Russia, South Africa, South Korea and Indonesia, among others. Indeed, if the current growth rates of imports respectively in the U.S. and China hold in the next few years, by 2021 China will surpass the U.S. to become the largest market for imports in the world. This is a mere three years away, according to the IMF and the Bureau of Business Analysis at the U.S. Department of Commerce.    

Against the backdrop of these powerful trends, Trump’s trade war is creating new impetus for the EU and Asia to speed up the opening of their markets to forge closer economic ties. This will lead to even faster growth than in the last decade in trade between the EU and Asia, accompanied by rising investment. Virtually everywhere outside of the U.S., a new sense of urgency is now afoot as policy makers seek to fast track regional free trade agreements. For instance, after Trump pulled out of the Trans-Pacific Partnership, a successor, renamed as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, was signed in March this year by 11 countries on both sides of the Pacific. Within Asia, China and Japan are seeking to mend fences, and the Regional and Comprehensive Economic Partnership, which includes China, is being prioritized as a major step toward Asia’s economic integration. A direct consequence of the Trump trade war, therefore, is faster and wider economic integration outside of the U.S., accelerating the shift of global economic center of gravity toward Asia.

Such a development in turn has profound business implications. As Europe and Asia forge closer economic ties, their tariffs against each other’s exports will come down. Businesses operating in these increasingly open markets will have to adapt to intensifying competition, thereby becoming more efficient, innovative and dynamic. The network of global supply chains that has revolutionized the nature of trade and investment since the 1980s will expand and become more productive and more densely intertwined across Europe and Asia while withering in the U.S. While 326 million American consumers are increasingly “protected” by Trump’s tariff wall, over four billion consumers in Europe and Asia will thrive and enjoy more, better and cheaper products and services provided by competitive and creative businesses.  

2.      Australia's new PM is Scott Morrison as moderate Malcolm Turnbull is forced out

Socially conservative architect of hardline asylum policies takes the helm as fifth prime minister in five years

The Guardian    24 Aug 2018 

Australia has a new prime minister in Scott Morrison – the socially conservative architect of Australia’s hardline anti-asylum seeker policies – after he mounted a late challenge during a drawn-out struggle for power in the governing Liberal party.

On Friday, incumbent Malcolm Turnbull failed in his attempt to stare down a challenge from hard right MP Peter Dutton, with insurgents in his party gathering enough signatures to call for a “spill” – or leadership contest.

That led to a three-way challenge that included Morrison, Turnbull’s treasurer, Dutton, the former home affairs minister, and Julie Bishop, the foreign minister. Turnbull himself stood aside from the contest.

Bishop was eliminated in the first round, and Morrison beat Dutton in a subsequent run-off, 45 votes to 40, suggesting the party is still deeply divided.

There appears no end in sight to the civil war consuming the ruling Liberal-led coalition government. The country may be headed to an election, with Turnbull saying he will not stay in parliament. His resignation in between general elections would erase the government’s single-seat majority in the House of Representatives.

Australia has now had five prime ministers in just over five years. Since 2010, four prime ministers have lost office, not at the ballot box, but torn down by their own parties, earning Canberra the unhappy appellation “the coup capital of the Pacific”.

Morrison was sworn in as prime minister on Friday by the governor general – the Queen’s representative in Australia – General Sir Peter Cosgrove.

In his first address as prime minister-elect, Morrison counselled unity for a riven party.

“Our job ... is to ensure that we not only bring our party back together, which has been bruised and battered this week, but that will enable us to ensure we bring the parliament back together,” he said.

Morrison said his government intended to address, as its major priorities, Australia’s “economic and national security”. But he also nominated Australia’s long-running drought – 100% of the state of New South Wales is currently drought-affected – as a key issue. “This is our most urgent and pressing need right now.”

Morrison sought to downplay suggestions an early election was imminent. “We intend to be governing,” the incoming prime minister said. “I don’t think anybody should be making any plans for any elections any time soon.”

In his valedictory speech, Turnbull sounded a warning against the rising tide of populist anti-immigration political rhetoric, promoted from within his own party. “We are the most successful multicultural society in the world, and I have always defended that and advanced that as one of our greatest assets,” he said. “We must never allow the politics of race or division or of setting Australians against each other to become part of our political culture.”

Turnbull also made another thinly veiled swipe at actors “outside the parliament” undermining his leadership – widely interpreted as an attack on the influence of Rupert Murdoch’s News Corporation newspapers and TV channels, which have consistently campaigned against him.

“There was a determined insurgency from a number of people both in the party room and backed by voices, powerful voices, in the media, really to bring – if not bring down the government – certainly bring down my prime ministership,” he said.

Morrison was treasurer in Turnbull’s administration, and before that, as immigration minister, he was behind Australia’s controversial hardline asylum-seeker policies – including indefinite detention on remote foreign islands.

The son of a policeman and an active member of a Sydney Pentecostal evangelical megachurch, Morrison wears his political ambition and his conservative credentials proudly.

He voted no in Australia’s plebiscite on same-sex marriage, listed “church” as one of his interests in his Who’s Who report, and regards former prime minister John Howard as his political inspiration.

Before his election to parliament in 2007 he was a factional kingpin in the rightwing of the New South Wales Liberal party.

Morrison’s first task as prime minister will be to promote rapprochement between the rival wings of his own party, a relationship that has grown increasingly toxic as Turnbull gave ground to conservative insurgents – especially over climate change and energy policy – only to be rewarded with more and more demands.

But there appears no immediate end to hostilities between the party’s “small l liberal” moderate wing and its hard-right conservative faction. After the leadership vote, conservative former prime minister Tony Abbott – himself ousted by Turnbull in 2015 – said: “We’ve lost a prime minister but we still have a government to save, that is what we will all do our best to do now.”

Turnbull, a wealthy former investment banker and lawyer, was publicly derided by some in his own party as “Mr Harbourside Mansion” over his home in the most expensive suburb in the country. He attracted the opprobrium of conservative party members for his outspoken support for same-sex marriage and promotion of action on climate change and the Paris emissions targets.

The Coalition government has faced persistently poor polling since 2016 and historically voters have tended to punish governments that change leaders mid-term.

The government also has a money problem. The opposition Labor party – allied to the union movement and other moneyed leftwing lobby groups – has amassed a massive war chest to fight the next election, not due until next year, but now likely much sooner.

The largest donor to the government last election – with the largest contribution in Australian political history of $1.75m – was Turnbull.

Facing challenge, Turnbull said this week he would resign immediately from parliament if he lost the prime ministership. On Friday, having been deposed, Turnbull promised to leave parliament “not before too long”.

3.      Both low- and high-carb diets can raise risk of early death, study finds

Eating a moderate amount of carbohydrates best for healthy lifespan, say researchers

The Guardian 16 Aug 2018

 Ditching the carbs has become a popular weight-loss strategy. Photograph: Monkey Business Images/REX/Shutterstock

Eating either a low-carb diet or a high-carb diet raises the risk of an early death, according to a major new study which will dismay the many people who have ditched the likes of bread, rice and potatoes for weight loss or health reasons.

Researchers who pooled the results of eight large studies have found that eating a moderate amount of carbohydrates is best for a healthy lifespan. Less than 40% or more than 70% of calories from carbohydrates carried a higher risk of mortality.

Not all low-carb diets are equal, however. People who ate a lot of meat and fats instead of carbohydrates, such as lamb, chicken, steak, butter and cheese, had a higher mortality risk than those who got their protein and fats from plant-based foods such as avocados, legumes and nuts. Popular weight loss diets such as Atkins and Dukan include a substantial amount of meat-based foods.

 “Low-carb diets that replace carbohydrates with protein or fat are gaining widespread popularity as a health and weight loss strategy,” said Dr Sara Seidelmann, a clinical and research fellow in cardiovascular medicine from Brigham and Women’s Hospital inBoston, who led the research published in the Lancet public health journal.

 “However, our data suggests that animal-based low-carbohydrate diets, which are prevalent in North America and Europe, might be associated with shorter overall life span and should be discouraged. Instead, if one chooses to follow a low-carbohydrate diet, then exchanging carbohydrates for more plant-based fats and proteins might actually promote healthy ageing in the long term.”

Seidelmann, who is both a cardiologist and a nutritionist, told the Guardian the team had published a substantial body of work “to thoroughly answer a question and not simply provide just one piece of the picture”.

“Nutrition is high up on everybody’s mind but there is such confusion about what we should eat. One day, a study is coming out telling us high carb is better, another day a study is telling us low carb is better.”